StepChange #debtmyths

StepChange_James · 5 December 2012 at 4:56PM

The myth:

There’s nothing you can do to stop payday loan companies taking payments #debtmyths

The reality:

When you sign up for a payday loan there is usually something in the small print that means you’ve agreed to something called a “continuous payment authority”. This means that you’ve given them permission to take payments from your debit card at a future date.

These kinds of payments are trickier to cancel than Direct Debits but not impossible.

Do you need to avoid payday loan payments swallowing up you bank balances? We’ve got a handy blogpost that talks through how to cancel a continuous payment authority, something we advise on every day.

If you’ve got a payday loan and are going to struggle to make the payment then you should get debt advice as soon as possible.

Time_to_face_the_music · 5 December 2012 at 11:14PM

Why do posts keep vanishing from this thread?

System · 6 December 2012 at 5:02PM

The myth:

You’ve broken the law if you fall behind on debt repayments #debtmyths

The reality:

It may be surprising to some but “Can I go to jail if I don’t pay my debts?” is one of the most common questions we receive from our clients. Missing payments on credit debts is a civil matter, so it’s not against the law.

Anyone familiar with the works of Charles Dickens will have heard about debtor’s prison, where you get flung into if you’ve got behind on your bills back in the old days. Thankfully the Debtors Act of 1869 abolished debtors prison, so missing a credit card payment won’t mean you end up doing a stretch in Strangeways!

fermi · 6 December 2012 at 5:05PM

StepChange_James wrote: »

The myth:

There’s nothing you can do to stop payday loan companies taking payments #debtmyths

Another very useful link: http://www.paullewismoney.blogspot.co.uk/2012/04/the-continuous-payments-racket.html

StepChange_James · 7 December 2012 at 5:04PM

The myth:

A debt management plan usually takes 10 years or more to pay off #debtmyths

The reality:

Many people approaching us for advice on debt management worry that a debt management plan (DMP) will take forever to clear their debts. We’ve gone back over the stats for our clients who’ve completed their DMPs and found that the average plan took five years, two weeks and five days to pay off (about the same as an IVA).

We’ve got an interesting blogpost if you’re curious about the difference between an IVA and a DMP.

StepChange_Private_Messages · 10 December 2012 at 4:44PM

The myth:

If you miss payments on your credit debt you‘ll be blacklisted #debtmyths

The reality:

Please don’t worry. There’s no such thing as a ‘blacklist’. It’s nothing more than an urban legend. If you miss or reduce a payment a note will be made on your credit file. Lenders must look at your credit file before they let you borrow from them but a less-than-stellar credit rating shouldn’t exclude you from every form of lending.

If you’re getting turned down for credit it could be a sign that you need debt help. We can help you put together an income and expenditure budget and work out how best to get on top of your finances.

System · 11 December 2012 at 4:55PM

The myth:

Creditors and debt collectors can call you at any time #debtmyths

The reality:

We often hear about creditors and debt collectors phoning late at night or early in the morning but, as the Office of Fair Trading (OFT) lays out in its debt collection guidelines, calling at unreasonable times or intervals is classed as harassment. This can include parts of the day if you work night shifts.

The OFT also warn debt collectors not to contact those in debt via social networking sites (read our 10 ways to stop debt collectors finding you on social media).

StepChange_James · 12 December 2012 at 5:02PM

The myth:

If you go bankrupt you will always lose your house #debtmyths

The reality:

Because bankruptcy is so complicated there’s unfortunately no blanket answer to this. It’s so important that you stay away from companies that offer to manage your bankruptcy for a fee. Instead, you should get free and independent debt advice.

If you have plenty of equity in your home, and it’s the only way to release your money in the property, the official receiver or trustee may have to sell it to help pay the bankruptcy debts. There are exceptions to this and you can read more in this government leaflet.

However if there’s little or no equity in your home you may be able to stay put if you can keep on top of the mortgage payments each month. Your official receiver may compare what you’re currently paying to local rent prices to ensure your mortgage payment is in line with them.

The official receiver or trustee still has 2 years and 3 months from the time of your bankruptcy to realise the asset if the value of the property increases.

StepChange_James · 13 December 2012 at 4:57PM

The myth:

If you get a county court judgment (CCJ), you’ll have to go to court #debtmyths

The reality:

All paperwork relating to county court judgments (CCJ) is sent through the post. You’d only have to attend court if you wanted to defend or vary the amount, but you certainly don’t have to do this.

Some may fancy their day in court, dressing up in a fancy suit and trying to win over judge with poetic defences and pithy asides. But they’ll be sorely disappointed; if they get a CCJ they’ll just need to post off a form they’ve filled in.

StepChange_James · 14 December 2012 at 2:17PM

The myth:

If you guarantee a loan for someone you’ll never be asked to make any payments. #debtmyths

The reality:

We understand why you may want to help your friend, but you should know what you’re signing up for first. When you agree to become a guarantor you’re responsible for the full debt if the person that borrowed the money can’t keep up with the payments.

Not being able to pay is usually down to events outside a person’s control, but could potentially leave you, the guarantor, in need of debt help. Think as well of the rift that could cause between you and the person you tried to help. Chances are you won’t be too impressed with them!

For this reason we recommend that you never act as a guarantor unless you’re able to afford the repayments.

StepChange #debtmyths

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